Energy Bill [Lords]
Debate between Chris Huhne and Meg Hillier(12 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Meg Hillier
We all share the mission of reducing carbon emissions, and we have all supported the Government in signing up to the fourth carbon budget, but the proof of the pudding will be in whether they can actually deliver. My sad worry is that the Bill will not deliver the home efficiency improvements it sets out. We want it to succeed, but it is a wishy-washy Bill that I fear will not meet the Secretary of State’s aims. It needs further improvement. It has no strategy or plan for delivery, and there are so many unanswered questions about practical delivery, even after being debated in both Houses.
The Secretary of State has staked his reputation on this market-driven home energy efficiency model. His claim that it will transform the energy efficiency of our homes, which represent 27% of emissions nationally, and create green jobs up and down the country is melting away, as publicly and privately the expected players are very critical of it. I re-emphasise that the Opposition strongly support the aim. The original thinking behind it came from my Government when we were in power. The need to tackle domestic emissions is unarguable, and we fully support the direction of travel. It is just a crying shame that the Secretary of State, with all Whitehall’s talent at his disposal, has managed to deliver a wet dishcloth of a Bill.
As five of the big six energy companies hiked their prices over the summer, it was clear that the vast majority of bill payers will face real pressure this winter. The Secretary of State’s proposal was that customers should shop around for the best deal, but with companies’ prices rising in line with one another, that suggestion rings hollow. The Government have abolished Warm Front before any replacement scheme has been introduced, and the new energy company obligation ushered in by the Bill leaves many questions unanswered. We pass the Bill tonight with that detail still to come.
The reality is that the Secretary of State, as a Lib Dem in a Conservative Government, and distracted by other matters, now lacks the focus to get even this flagship Bill delivered in time. We still have more than 50 pieces of secondary legislation to pass, so the timetable is in serious doubt. I do not doubt his commitment to this, but the reality is that the Government as a whole are not serious about their green agenda. With friends like that in No. 10, we can have little hope that the real opportunities for growth and jobs in greening our energy supplies and helping those who are shivering under blankets will be met by the Government.
Chris Huhne
May I point out to the hon. Lady that the Government have increased the funding for vulnerable groups in fuel poverty by two thirds, compared with the Government she supported? What is her response to that?
Meg Hillier
We will wait to see whether the energy company obligation will truly deliver, because we have real doubts about it. We are yet to see the detail, and the devil will be in that detail. There are 50 pieces of secondary legislation that will flesh out that and other elements of the Bill. We will continue to work on and with the Government, as appropriate and where possible, to put flesh on this skeletal Bill, as well as on fuel poverty and affordability, on climate change and across the board in this area. If the Government fail, they will fail this generation of families this winter and every winter. They will fail future generations who will not forgive them for mistaking rhetoric and ambition for action and outcomes.
Electricity Market Reform
Debate between Chris Huhne and Meg Hillier
The Secretary of State for Energy and Climate Change (Chris Huhne)
With permission, Mr Speaker, I would like to make a statement on reform of the electricity market. Since privatisation in 1990, our electricity market has served us well, delivering reliable, affordable electricity, but in the years ahead we face unprecedented challenges, which the existing market was not designed to meet. Over the next decade, around a quarter of our existing power stations will close, threatening the security of our electricity supplies. Some £110 billion of investment is needed to replace those plants and to upgrade the grid. That is twice the rate of investment of the last decade and the equivalent of 20 new power stations. At the same time, demand for electricity could double over the next 40 years as the population increases and as we increasingly turn to electricity for heat and transport. We also face ambitious carbon emissions and renewable energy targets as we seek to build a cleaner energy future for Britain and for the world. To achieve our goals, we need to take decisive action now to increase low-carbon electricity generation, including nuclear and renewable energy as well as carbon capture and storage.
None of these challenges can be met for free. We will have to pay to secure reliable, clean electricity for the future and we cannot ignore the long-term trends in electricity prices. Increases in wholesale costs and the carbon price are likely to lead to higher bills in future, even without factoring in the huge investment in new infrastructure that is needed. It is vital that we put in place market arrangements that deliver this investment as cost-effectively as possible. The current electricity market simply is not up to the job and cannot deliver investment at the scale and pace we need. Without reform, our reserve capacity—the power plants we can call on when demand surges—will fall to uncomfortable levels. We would face a much higher risk of black-outs by the end of this decade and we would also be locked into a worrying reliance on fossil fuel imports, putting us at risk of rising and volatile prices. Consumers could end up paying more.
That is why I am putting before the House today a series of measures to reform the electricity market, diversifying our generation mix and boosting investment in secure, sustainable and home-grown low-carbon technologies. There are five key elements to our reforms. First, the Chancellor announced in the Budget a new carbon price floor to put a fairer price on carbon, thereby reducing uncertainty for investors and providing a stronger incentive to invest in low-carbon generation now.
Secondly, we will send a clearer message that low-carbon electricity is a key part of our future energy mix. We will introduce a new system of long-term contracts to remove uncertainty for investors and consumers and to make low-carbon energy more attractive. Contracts for difference will be introduced for all forms of low-carbon generation, lowering the cost of capital and allowing clean technologies with high up-front and low long-run costs to compete fairly against traditional unabated fossil fuels. This will build on the carbon price floor, providing the additional clarity and certainty that investors need.
Thirdly, we will introduce an emissions performance standard to send a clear regulatory signal about the amount of carbon that new fossil-fuel power stations can emit. This will reinforce the requirement that no new coal-fired power stations are built without carbon capture and storage, while ensuring that vital investment in gas can take place. Carbon capture and storage is a key part of our plan to decarbonise electricity generation. It is the only technology that can potentially reduce emissions from fossil fuel-fired power stations by as much as 90%.
Fourthly, to ensure security of supply in the future, we will introduce a new contracting framework for capacity, changing the way we secure our back-up electricity. That capacity mechanism could mean centrally procuring capacity that is set aside from the market and used only when needed, or it could mean a market-wide mechanism, in which all providers offering reliable capacity are rewarded. Under both options, we plan to ensure fair and equivalent treatment between all the different ways of accomplishing what we seek—demand response, storage, interconnection with our European partners, and extra generation. Shifting or cutting demand for electricity is likely to be more cost-effective than simply building more and more power plants, and complements our work to drive down demand through energy efficiency measures such as the green deal and smart meters. Fifthly, we will put in place transitional arrangements to ensure that there is no hiatus in investment while the new system is set up, and we will create new institutional arrangements to deliver the reform package.
Together, the reforms will tackle the immense challenges facing the electricity market. They will put in place the framework to deliver the capacity and demand-side response that we need to guarantee future security of supply. They will encourage investment in proven low-carbon generation technologies, and will give investors confidence that there will be a market for electricity generated with commercial carbon capture and storage—confidence that will drive investment in both demonstration and commercial CCS plants.
Six energy companies supply around 99% of customers in the UK. Alongside action by Ofgem to improve liquidity, the reforms will boost competition within the market. They will make the UK a magnet for low-carbon investment, generating jobs and growth. That will help energy-intensive industries. However, we are also committed to bringing forward a package of measures to ensure our continued international competitiveness.
The reforms will achieve our aims at least cost to the consumer, with bills for households and businesses likely to be lower and less volatile over the period to 2030 than if we had left the market as it is. They will enable us to build a flexible, responsive electricity system, powered by a diverse and secure range of low-carbon sources, en route to a cleaner, greener future. The reforms insure us against fossil fuel price shocks, end 25 years of policy dithering, and will keep the lights on, and bills down.
Alongside the electricity market reforms, I am also publishing today the renewables road map. For too long, discussion about renewable energy has focused on barriers. Now, for the first time, we have set out a detailed, step-by-step plan to overcome those obstacles. The road map sets out a comprehensive action plan to accelerate the UK’s deployment and use of renewable energy. It puts us on the path to increase our renewable energy consumption fourfold by 2020 while driving down the cost over time. Growth on that kind of scale will be challenging, but necessary.
The road map identifies eight technologies that have the greatest potential for the UK, such as offshore wind, where we have abundant natural resources and already have the world’s largest market. Subject to further value-for-money assessment, the Department is setting aside up to £30 million over the next four years to support technology development programmes to improve the efficiency and reduce the costs of offshore wind. With industry, we are setting up a taskforce to drive the work to achieve cost-competitive offshore wind. The recently published microgeneration strategy also outlines the actions that the Government are taking to tackle the non-financial barriers that could prevent microgeneration from realising its full potential. Together, the renewables road map and the microgeneration strategy, which has already been published, will reduce costs for consumers, and enable mature renewables to compete against other low-carbon technologies in the longer term.
I am also publishing today the final report of the Ofgem review. The review reaffirms the Government’s commitment to a strong, independent regulator, able to give confidence to investors, protect consumers and help meet our energy and climate targets. The summary of conclusions was published in May; the final report provides further detail on how the Government will seek to strengthen the regulatory framework.
The package of reforms that I have announced today will yield the biggest transformation of the market since privatisation. They will create an enduring framework for future investment, and will secure our electricity supplies for the future, providing our consumers with the best deal possible, helping us meet our ambitious carbon targets, and putting us at the forefront of low-carbon technological development, ready to lead the world in the next energy revolution. I commend this statement to the House.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I thank the Secretary of State for advance sight of his statement. We are pleased that he agrees with his predecessor, my right hon. Friend the Member for Doncaster North (Edward Miliband), about the need for reform. The Government have already sent some signals about the future shape of the UK energy market.
The Secretary of State should be congratulated on standing up to the fuzzier elements of his party with his U-turn on nuclear, which he no longer happily describes as a “failed technology” but says is an essential part of the UK's getting off the “oil hook”. The Government’s eventual acceptance of the recommendation of the Committee on Climate Change in its fourth carbon budget was largely welcomed by most people, even if his colleague the Business Secretary was described as “squirming in his seat like a schoolboy” at the Cabinet meeting which discussed it.
However, the Government have failed to deliver on many fronts since the Secretary of State for Energy and Climate Change took office. Recent ill-judged Government intervention in the energy market has already led to a hiatus in energy investment and uncertainty across all sectors. The solar feed-in tariffs fiasco destabilised the solar sector and sent shockwaves through other renewable sectors. Companies, including RWE, are considering pulling out of the UK because of the uncertainty caused by the Government in the investment landscape. That was underlined by the Pew Environment Group’s report, which showed that the UK dropped from fifth to 13th in a global ranking of countries for green investment. We have seen a green investment bank failing to deliver the necessary investment now and being criticised by the CBI director general, John Cridland, who warned that the bank
“certainly won’t work if it needs the Treasury’s permission to blow its nose.”
There is a question mark over whether the Secretary of State’s proposals will deliver. The track record is not good. We believe that the Government must meet some key tests if reform is to work. A new market needs to be greener and to create certainty for industry, room for innovation in emerging energy solutions, and crucially, a good deal for consumers both as users of energy and as taxpayers, and it must deliver the necessary investment in the UK energy sector for security of supply.
In the White Paper, we have a mixed bag of measures. There is an emissions performance standard—a policy that the Energy and Climate Change Committee considers, at the level set,
“would have no material impact and is therefore pointless.”
I could say rather uncharitably that that sounds a little like a summary of Government green policy. Certainly, it is not popular, and already industry is puzzled about exactly what it will achieve. If we are to have an emissions performance standard, the Secretary of State needs to explain to us why it is any more than green window dressing. How will the transition to carbon capture and storage be accommodated within this measure, when we are still awaiting not only the sign-off on project 1, but the future Treasury and European funding for projects 2, 3 and 4?
The proposals also include a carbon floor price, although we knew about that because it was announced in the Budget independently of these proposals—a running theme for the Department, which most of the time seems to be run by remote control from 11 Downing street. The Department has only just woken up to the impact that this tax grab on industry and its potential to export businesses and their emissions overseas will have on the UK industrial landscape. Better late than never, but it is catch-up.
Two measures are being consulted on. A contract for difference will pump public money into supporting more expensive energy production—a mechanism which we hear from the Secretary of State will encourage other users into the market, but with such complex administration, we worry, as do many businesses, that small suppliers and new investors will struggle to keep up. We also see proposals for a capacity mechanism and energy auctions, the devil of which will be in the detail. The right hon. Gentleman should expand on which technologies will deliver most benefit, what the costs to the UK will be, how the consumer will afford it, and how we will avoid expensive stranded assets in a new dash for gas.
Investors need confidence, certainty and clarity. The White Paper could help, or it could herald an era of overly complex and overlapping measures, paid for by the taxpayer, that will lead to higher than necessary energy bills. Customers are currently getting a raw deal, so any change must support the consumer. The existing big six energy companies will undoubtedly need to provide in this era of new energy generation, but we need to free up the suffocating oligopoly that stifles real competition from new energy investors. The prize is driving down the cost of new energy generation and prices and increasing real choice for consumers. The Secretary of State, who has been insouciant in the face of rising energy bills, should stop worrying so much about his next meeting with the big six chief executives and start worrying a bit more about the consumer.
Will the Secretary of State please tell us exactly when the legislation will come before Parliament and when he expects the reforms to be implemented? We already have the delayed Energy Bill circling Parliament and a renewables road map announced today: he cannot keep stacking up policies like waiting aircraft. I am pleased that he is convening a group to look at decentralised energy, but can he give us more details on that? So far his Department has been rolled over by the Treasury at every turn, so could he tell us what these changes will cost the taxpayer and what he is doing to protect the public from unreasonable price rises? How will the Government decide when to conduct energy auctions, and how will he ensure that all players will be able to bid in order to reach this new dream world he talks of? Apart from the now delayed green deal, what is his strategy for reducing energy demand?
Meg Hillier
We cannot afford the dithering, delay and postponement that has characterised Government policy so far. We want to support and work with the Government to achieve these outcomes, but we need answers on those points from the Secretary of State.
Chris Huhne
We are certainly having to play catch-up—I make no bones about it—because after 13 years of Labour Government we inherited a situation in which the UK was ranked 25th out of the 27 European Union member states on installed renewables. The hon. Lady talks about the speed and dynamism exhibited by the Opposition when they were in government, but not a single new nuclear power station has been consented to since 1986, so the reality is that the track record of which she boasts is entirely mythological, like some Grecian beast seen far off in the mists that suddenly vanishes.
We are confident that there will be enormous benefits for small suppliers as a result of these changes, because it is precisely the long-term contracts that will encourage new entrants into the market and ensure that they have certainty about price, which they cannot rely on if they do no understand the market as well as the big six. That will make our market more competitive, which is a fundamental way of ensuring that we get a better deal for the consumer in the long run.
The hon. Lady asked which technologies will benefit more. We are not attempting to pick winners, unlike the Opposition, evidently. We want a level playing field for all low-carbon technologies, because we recognise the genuine uncertainties about the development of such technologies. As we learn more about which technologies will be the most effective and have the lowest cost, we will invest more in the winners, and that will be discovered through normal market processes.
When it comes to consumers, we have been clear about the need to reduce the complexity of tariffs and insist that every energy bill shows the lowest tariff available from the supplier, and we have had a clear review of the retail market from Ofgem. We want greater competition and are encouraging new entrants through all these means, in addition to the support of a 67% increase in the social discount budget, compared with the money set aside under voluntary agreements by the previous Labour Government. We are helping in particular those who most need help with their energy bills, because they are the most vulnerable, and Government Members can be proud of that.
New legislation will be introduced at the beginning of the next Session, in May 2012. The working group on decentralised energy will attempt to tackle all the different barriers to decentralised energy, ensuring that it is able to play its full part in diversifying our supply. The key to auctioning, which I very much want us to adopt, is that there should be greater certainty about costs so that those who are participating in the auction are able not only to see that they have a reasonable chance of winning but to identify their costs.
The hon. Lady asked what measures we are taking on the reduction of energy demand. The most significant of those is the pioneering measure in the Energy Bill—the green deal. We are the first of any of the leading G20 countries to introduce this measure, which we continue to maintain is on course for launch in October 2012, when it will be a roaring success.
Oral Answers to Questions
Debate between Chris Huhne and Meg Hillier
Chris Huhne
The key is to encourage people to act. At the moment 99% of people are with the big six, and they are very unlikely to look at alternatives and to switch. If we can get people to look more comprehensively on a regular basis at alternatives, substantial savings can be made, and we can drive greater competition, we can simplify bills, we can bring more new entrants into the market, we can make sure that Ofgem is keeping that market under review and we can give the best possible deal to British consumers.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
We have heard a lot of warm words from the Secretary of State today, and before the election the Prime Minister made promises about what he would do to tackle energy price increases if he got into power. We have seen these huge price increases, and customers are rightly confused and angry, so what is the Secretary of State going to do right now to tackle this problem? The electricity market reform is all very well, but we could deal with issues relating to doorstep selling and smart meters. There is action that he could take now, so I would like to hear what he is planning to do to help consumers today.
Chris Huhne
As the hon. Lady knows, much of what we can do takes time, but we have already, in just over a year in government, moved to legislate on the warm homes discount. That means that we will be providing a legal underpinning for the scheme which will help our poorest consumers and those most at risk in fuel poverty. We are also moving on energy saving and moving to increase competition in the market. We are trying to provide assurance and an increased ability to switch, and to simplify tariffs. That is quite an agenda, and none of it was being undertaken by the previous Government.
Chris Huhne
I can assure my hon. Friend that I met representatives of the aluminium industry very recently and that we have a regular programme of meeting companies from energy-intensive industries. Indeed, I have also had contact with trade union representatives from energy-intensive industries. We want to see a solution that will ensure those industries are able to thrive within the United Kingdom—she can have my absolute assurance on that. As my colleagues have pointed out, there are discussions under way between BIS, the Treasury and us on this.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The green economy road map was promised in April. Where is it?
Chris Huhne
The green economy road map is under way in the Green Economy Council. It is very important that we get that process of work right, and the hon. Lady will know that getting a cross-governmental road map right is not always the easiest process, but I can assure her that it is under way and that she will be put out of her misery shortly.
Meg Hillier
Whenever the right hon. Gentleman’s Department has to work with other Departments, progress on green issues stalls. We have now learned that the flagship Energy Bill, which the Minister of State, the hon. Member for Wealden (Charles Hendry), has spoken about a great deal today, has been shelved. When will we see the Bill back in the House, and will it delay the start of the green deal?
Chris Huhne
Obviously the timing of the final stages of the Energy Bill is a matter for the business managers, but we are determined to hold to the October 2012 deadline for the launch of the green deal and are working to ensure that we meet it, despite the congestion we have faced in the House of Commons. I am grateful to the hon. Lady for encouraging us to come forward with further details of our policy and note that she is about to offer what has been billed as the first detailed insight into the Opposition’s thinking on low-carbon policy at a green business event, which I am sure we all look forward to.
Oral Answers to Questions
Debate between Chris Huhne and Meg Hillier
Chris Huhne
I am grateful to my hon. Friend for that question. The UK has a robust regime and it is important to recognise that we intend to ensure that shale gas operations are carried out in a safe and environmentally sound manner. Shale gas exploration has been controversial, especially in the United States where regulation has not been well implemented, but here it is subject to a series of regulatory checks, including planning permission, health and safety checks, consultation with the Environment Agency and drilling consent from my Department. The Environment Agency in particular has scrutinised Cuadrilla’s plans thoroughly and does not consider that they pose a significant risk to the environment, including to water resources.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
In the last period, lending to small and medium enterprises dropped by 2%, so Project Merlin is not delivering—the Prime Minister has spoken on this. We know the importance of the green investment bank and of the need to get green businesses to grow—that is the subject of cross-party agreement. So why will the green investment bank not lend to small businesses?
Chris Huhne
The exact remit of the green investment bank has still to be announced and I urge the hon. Lady to wait for that. We have said that it will be built up and able to borrow and lend from April 2015. That will be the most significant point, because at that point it will be able to provide finance for some of the biggest investments in the renewable sector in particular. My Department is acutely aware of the importance of encouraging small businesses and we intend to do so.
Meg Hillier
Once again, we hear warm words from the Secretary of State but no action. Many small businesses will be out of business by 2015 and we will have lost that opportunity for technological development in the UK backed by the green investment bank.
On a wider point, we have heard rumours in the newspapers about what the green investment bank will be and the Secretary of State has just talked about a future announcement. Will he announce it to the House himself, or will he leave to the Deputy Prime Minister to make a speech in some other place about what will happen with the green investment bank?
Chris Huhne
I should point out to the hon. Lady that the lead Department on the green investment bank is the Department for Business, Innovation and Skills, so my right hon. Friend the Business Secretary will be making the formal announcements. That will happen in due course.
Nuclear Industry Safety
Debate between Chris Huhne and Meg HillierUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Chris Huhne
I respect the hon. Gentleman’s long-standing opposition to nuclear power and his concern, interest and expertise in these issues, but I think he has gone too far in impugning the integrity of the chief nuclear inspector. I am not a scientist, but I have had a number of meetings with Dr Weightman, and I am absolutely convinced that he is an entirely independent, well-respected professional. Indeed, he is so well respected that after I asked him to conduct the inquiry and make his recommendations, he was subsequently approached by the International Atomic Energy Agency to lead the international inquiry into Fukushima. It beggars belief not to recognise his standing in the international community and his independence. This is a fact-based and evidence-based report. My concern has always been to base our policy on the facts and the evidence, and I think that the report does that.
The hon. Gentleman raised two specific points. He will find that I entirely agree with him on extreme weather events. It is absolutely essential that all our critical energy infrastructure needs to be proof against such events, not just the nuclear facilities. On page 97 of the report, he will find a useful table that summarises the extent to which our existing nuclear power stations are prepared against seismic hazards and flood heights. The hon. Gentleman’s description of our vulnerability on this front simply does not accord with the facts as set out in Dr Weightman’s report. First and foremost, we do not have the same reactor design. Secondly, we are not subject to earthquakes of anything like the same magnitude. The earthquake that so unfortunately hit Japan was 65,000 times stronger than the largest earthquake ever recorded in British territorial areas, which was centred on Dogger Bank in 1931. The situation is therefore entirely different. The hon. Gentleman will also see a discussion in the report about the vulnerability to tsunamis, and about whether the flood defence heights set out for each of the power stations on page 97 are adequate, and the conclusions stand.
I entirely take the hon. Gentleman’s point about the importance of security against terrorist attack. This Government have been very careful to improve the security arrangements in our nuclear facilities since we came into office a little over a year ago, and we will continue to do so.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
We, too, welcome the report. Safety in the nuclear industry is of paramount importance, and it is worth noting that the UK has a good safety record. I welcome Mike Weightman’s view that we need to be continually vigilant in that regard. Nuclear is clearly crucial to security of supply in a low-carbon economy, especially in the light of yesterday’s decision. What is the Secretary of State now doing to ensure that the nuclear programme is still on track? When will we see new plant in this country? Will he be pressing ahead with the national policy statements over the summer, or will he wait for the final report in the autumn? Will the lifespan of the existing nuclear stations be extended as coal-fired power stations go off-line? Will he step up his efforts to boost renewable energy to fill the emerging energy gap? That is an area in which we have seen a lack of action from the Government. Finally, although the Secretary of State keeps denying the subsidy issue, to hide his embarrassment, will he acknowledge the need for market support to ensure that we have safe new nuclear in this country as soon as possible?
Chris Huhne
I am grateful to the hon. Lady for her questions. Clearly, there has been a delay in the new nuclear programme preparations as a result of Dr Weightman’s report, and I signalled that we needed to do that when I asked Dr Weightman to look at this matter. I am determined, as are the whole Government, to base our evidence on fact, rather than on emotional, knee-jerk responses, which would be entirely inappropriate given the importance of the issues. We will bring forward the energy national policy statements as soon as we can, and I would very much hope that we will be able to catch up over the next few months and years following the delay. As I mentioned in the House yesterday, we have already begun work at Hinckley Point, where EDF is preparing the earthworks for the first of the new nuclear reactors. I am keen to deliver on the commitment in the coalition Government programme that new nuclear should, subject to the proviso that there is no public subsidy, have a place in our energy mix.
I am not going to take any lectures on renewable energy from the hon. Lady. Our inheritance was to be 25th out of 27 European Union member states for installed renewable capacity. We are in the dunce’s corner as a result of 13 years of Labour policy, so the best commitment I can make is to say that over the next few years we are absolutely determined to be the fastest improving pupil in the class.
On the hon. Lady’s final point, I set out in October a very clear statement about public subsidies. She has to recognise that there is an enormous difference; money such as that available under the European Union emissions trading scheme penalises activities that generate carbon and therefore implicitly subsidises activities that do not generate carbon, and is designed to correct what Lord Stern has described as
“the greatest market failure of all time”.
On that basis, we will continue to have policies that encourage low-carbon alternatives, but there will be no support to nuclear; it is a mature industry and there is no justification for extra support.
Fourth Carbon Budget
Debate between Chris Huhne and Meg Hillier
The Secretary of State for Energy and Climate Change (Chris Huhne)
Today I am announcing that the Government propose to set an ambitious target in law to reduce greenhouse gas emissions in line with the advice from the independent Committee on Climate Change.
Signing up to an ambitious fourth carbon budget will result in no additional costs to consumers during this Parliament. We will, however, undertake a review of progress in early 2014 to ensure that our carbon targets are in line with those of the European Union. We are working up a package of measures, to be announced by the end of the year, to help energy-intensive industries adjust to the low-carbon industrial transformation while remaining competitive.
By agreeing to the level proposed by the Committee on Climate Change, we are demonstrating our desire to drive the changes needed to turn the UK into a dynamic, low-carbon economy that is attractive to investors in the new and growing low-carbon sectors. We are also sending a clear signal to the international community that the UK is committed to the low-carbon economy. That will help us to reach agreement in Europe on moving to a 30% emissions reduction target and build momentum towards a legally binding global climate change deal.
The Climate Change Act 2008 sets a target to reduce greenhouse gas emissions in the UK by at least 80% from 1990 levels by 2050. It also requires Governments to set carbon budgets, which are limits on greenhouse gas emissions in the UK for consecutive five-year periods. Carbon budgets must be set at least three budget periods in advance. They are designed to put emission reductions on an appropriate and cost-effective pathway to our 2050 target. The first three carbon budgets were set in 2009, following advice from the independent Committee on Climate Change. The fourth carbon budget, which sets the limit on emissions for the five-year period from 2023 to 2027, has to be set in law by the end of June 2011.
As advised by the Committee on Climate Change, the level that we propose setting in law would mean that net emissions over the fourth carbon budget period should not exceed 1,950 million tonnes of carbon dioxide equivalent, which is a 50% reduction from 1990 levels. As required by the 2008 Act, once the fourth carbon budget has been set in law, we will publish a report setting out the policies and proposals required in the medium and long term to meet the budget, building on the strong foundation provided by our existing policies. That will take the form of the revised Government carbon plan later this year, following the publication of the interim version in March.
The Committee on Climate Change advised that we should aim to meet the budget through emissions reductions in the UK, rather than by relying on carbon trading, such as under the EU emissions trading system or the purchase of international credits from projects abroad. We will aim to reduce emissions domestically as far as is practical and affordable, but we also intend to keep our carbon trading options open, to maintain maximum flexibility and minimise costs in the medium to long term. Given the uncertainty involved in looking so far ahead, that is a pragmatic approach.
Under the Climate Change Act, emissions reductions by the UK’s industrial and power sectors are determined by the UK’s share of the EU emissions trading scheme cap. That protects the UK industrial and power sectors from exceeding EU requirements. However, if the EU ETS cap is insufficiently ambitious, disproportionate strain could be placed on sectors outside the EU ETS, such as transport. To overcome that problem, and to provide clearer signals for businesses and investors, the Government will review progress towards the EU emissions goal in early 2014. If at that point our domestic commitments place us on a different trajectory from the one agreed by our partners in the EU under the ETS, we will revise up our budget as appropriate to align it with the actual EU trajectory. In line with the coalition agreement, the Government will continue to argue for an EU move to a 30% target for 2020, and for ambitious action in the 2020s.
As part of the transition to a low-carbon economy, we need to ensure that energy-intensive industries remain competitive and that we send a clear message that the UK is open for business. Before the end of the year, we will announce a package of measures for the energy-intensive businesses whose international competitiveness is most affected by our energy and climate change policies. Rising electricity costs pose a risk to those businesses’ sectors, which are critical to our growth agenda. We will therefore take steps to reduce the impact of Government policy on the cost of electricity for those businesses, allowing them to continue to play their part in delivering our green industrial transformation. In that way, we will ensure that those sectors remain internationally competitive and send a clear message that the UK is open for business.
It is important to stress that the UK’s existing policies already put us on track to meet the first three carbon budgets. They also provide a strong foundation for the fourth carbon budget, implying no additional near-term costs. We are reforming the electricity market, making homes and businesses more energy-efficient through the green deal, ensuring that new homes are built to a high energy efficiency standard, encouraging the uptake of ultra-low carbon cars and setting up a green investment bank.
Meeting the 1,950 million tonnes target that we propose for the 2023 to 2027 period is ambitious but achievable. By providing long-term clarity for investors, the fourth carbon budget places the UK at the leading edge of the global low-carbon industrial transformation. It will set Britain on the path to green growth, establish our competitive advantage in the most rapidly growing sectors of the world economy, generate jobs and export opportunities in those sectors, maintain energy security and protect our economy from oil price volatility. It is a framework not just for action on climate but for growth and prosperity.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I thank the right hon. Gentleman for early sight of his statement this afternoon. May I make it very clear that we welcome the fact that the Government have finally made a decision on the fourth carbon budget? We know that it has been a rocky week for him, as his colleague the Business Secretary sought a very different decision on this issue. We also know the many battles that he has lost within Government on the green agenda, so I congratulate him on this progress. I welcome the fact that he has not, after all, ducked the chance to answer questions on this important matter and is here before the House today.
I need to pick up on a point that the right hon. Gentleman made. He talked about our being on track to meet the first three carbon budgets, but I do not really think that is thanks to the current Government. We have seen a go-slow from him on green progress. Can he reassure us that he, the Treasury and the Business Secretary are united in delivering on these challenging targets? Can he be sure that he at least has the support of the Prime Minister?
The importance of this decision cannot be overstated, and I shall not repeat what the Secretary of State clearly laid out on the rationale behind the Climate Change Act 2008, which was established under the previous Government. However, I am puzzled about the 2014 review that he announced, because it introduces new uncertainty for those investing in the country’s greener future and breaks with the five-year cycle. He has already failed to provide business certainty by delaying the green investment bank and pulling the rug from underneath the solar industry. It is therefore essential that the scope of that review is clarified so that it does not do the same.
With those budgets now agreed, the Government must deliver on policies to meet them. As I have said, we have seen over the course of this year the Government failing to deliver on their green promises. The long-awaited green investment bank is unable to borrow till 2015—no rush there!—and it is the subject of yet more disagreements. Confidence in the renewables sector was shaken by a hasty and ill-conceived revision of the feed-in tariff, and of course, the commitment to zero-carbon homes was scrapped with no notice.
The right hon. Gentleman’s confidence in his record belies the facts. He needs to focus on his Department and on the detail of this agenda, which is very important to the future not just of the UK, but of the world. For the UK to meet those targets, we need a clear plan from the Government. The right hon. Gentleman talked about a strong foundation, which we need, but he needs to get real and to deliver on that.
We cannot meet our targets without a major reduction in domestic emissions. It is therefore critical that the Government make the improvements to the Energy Bill that the Opposition have demanded. Most importantly, they need to be clear on what carbon reductions the green deal will deliver, which, as we said last week, cannot be left to the market to decide.
Policy needs to be joined-up if we are to have the green industrial revolution that this country needs. We are clear that there is cross-party agreement on the carbon-reduction trajectory, but I should like to ask a few detailed questions of the Secretary of State. What will be the purpose and scope of the 2014 review, which I have already highlighted? Is there a prospect that the Government will weaken the targets that he announced today, or is he suggesting that they can only be tightened? What are the Department of Energy and Climate Change and the Department for Business, Innovation and Skills doing to support energy-intensive industries? When will he have more detail on that? He alluded to that, but we need more detail.
Will the Government introduce clearer aims for the green deal, so that we can be clear on how it will contribute to the necessary emissions reductions? When will we see the national policy statements, including on nuclear? Will that happen before the summer? When will the revised carbon plan be published? Will the Secretary of State and his Department consult widely on that?
After scrapping the grant funding for wave and tidal—we still await the renewables obligation certificates review—how will the UK gain a competitive edge in wave and tidal energy, in which we should be groundbreaking? Will the Secretary of State introduce an accelerated timetable for the trial and deployment of industrial-scale carbon capture and storage for coal and gas?
Does the Secretary of State agree with the Committee on Climate Change that we need to be more explicit in our support for new nuclear and onshore wind? Finally, what plans do the Government have for introducing road pricing, as suggested by the Committee? Has he consulted the Transport Secretary? Is that a policy for the next Parliament, or is there an urgent need to legislate for vehicle use now?
Chris Huhne
Perhaps I would be forgiven for wondering whether the hon. Lady and I have been living in the same country for the past few years. Given the picture that she is painting of policies that have been put in place to deliver on carbon budgets, she should perhaps remember that our inheritance after 13 years of the previous Labour Government is that our renewable sector is 25th out of 27 EU member states. That is not a record of which the hon. Lady can be proud. As for efforts to be made, for example, on energy efficiency, it took this Government to introduce the Energy Bill, which legislates for the green deal, which is the most comprehensive attempt to deal with energy saving in future.
Since the hon. Lady asked, I can assure her that the carbon budget has been approved unanimously by the Cabinet and has the support of the Business Secretary, the Chancellor and the Prime Minister. It is an important commitment by the Government, because it is the first commitment beyond the period for which the EU has legislated. Unlike the previous Labour Government’s three carbon budgets, this one goes beyond what the EU requires of us. We have set it according to our own domestic legislative framework and with our own domestic legislative agenda.
The 2014 review will be simple and clear. On the traded sector, which is crucial to our international competitiveness, we will review what is happening in the rest of the EU, because it is appropriate that we move at the same pace as the sector there. The hon. Lady mentioned that the green investment bank can borrow in 2015, which is crucial because the second part of this decade will see the greatest need for borrowing powers to ensure the installation of renewable and other low-carbon energy. I am astonished by her description of what has happened so far under this Government. We have set aside more than £800 million for a renewable heat incentive, and we are legislating for a carbon price floor.
Despite the Opposition’s warm words, in 13 years of a Labour Government not a single piece of turf was turned in order to install a single new nuclear reactor, yet work has already begun at Hinkley Point. The sense of urgency in dealing with the climate change challenge displayed by this Government is of an entirely different order of magnitude. On clean coal and gas, about which the hon. Member for Bolsover (Mr Skinner) and some of his friends are particularly concerned, the Government, in an extremely tough and difficult expenditure round in which we have to clear up the mess inherited from the Labour party, found £1 billion to set aside for the first commercial-scale carbon capture and storage project. In 13 years under Labour, no money was put aside and no planning was done for low-carbon growth.
We will proceed with our national planning statements, and there will be an interim review by the nuclear regulator, Mike Weightman, which I anticipate coming shortly. The hon. Lady asked a detailed question about road pricing. We have made it clear already that there will be no plans for that in this Parliament. I repeat, however, that we are set on a road that will unlock enormous opportunities for British business, with a low-carbon economy and high growth.
Oral Answers to Questions
Debate between Chris Huhne and Meg Hillier
Chris Huhne
I assure the hon. Gentleman that I have made it clear in every statement I have been asked to make on this issue that safety is absolutely paramount. That is precisely why I want Dr Mike Weightman to examine all the lessons from Japan, and for us to base any debate on the facts and the evidence, and not on knee-jerk reactions. There have been knee-jerk reactions in other countries, but that is not the right basis for British policy.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It is fascinating hearing the Secretary of State dance around on this issue. I welcome his remarks as far as they go—clearly safety is paramount in nuclear power—but he has made some comments over the past few days and has today failed to be emphatic about the Government’s position on nuclear. Will he make it clear? He has used words—[Interruption.] I can hear chuntering from those on the Government Front Bench. He has used words such as “we envisage a role”; he has pointed again to a study of a future without nuclear on his departmental website; and he has talked in The Observer about an
“80% reduction in emissions…without new nuclear”
if we invest more in renewables. Those are red herring statements. Will he be emphatic and make it clear to investors what the Government’s position is on new nuclear? Will he tell us clearly: is he backing new nuclear?
Chris Huhne
I do not think investors are under any illusions about the position. At the Nuclear Development Forum, I said very clearly that we continue with the plans as set out in the coalition agreement, and that we envisage a role for new nuclear and want to see new nuclear come on, but that we have to put an emphasis on safety. That is why we commissioned Dr Mike Weightman’s report. I do not anticipate that it will lead to enormous changes, but we will have to wait to see its results and base the debate on the facts.
Oral Answers to Questions
Debate between Chris Huhne and Meg Hillier(13 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Chris Huhne
The hon. Gentleman will be aware that we have announced the Warm Homes discount, which will ensure, through legislation, that the particularly high fuel bills suffered by those in fuel poverty are tackled, which is a considerable advance on the voluntary arrangements that we have had until now. I come back to the point I made in response to my hon. Friend the Member for Crawley (Henry Smith), which is that we must tackle the roots of the problem. The energy bills of people on low incomes can vary by a factor of six. If they are lucky enough to be in decent home standard social housing, they will have low energy bills, but if they are in private rented housing they may have very high energy bills. That is what we have to tackle and that is what we will do with the green deal.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I am delighted about the investigation into domestic fuel prices, which my hon. Friend the Member for North West Durham (Pat Glass) and the official Opposition have been calling for, and glad that the Government have finally acted. Rising oil prices, as my hon. Friend the Member for Streatham (Mr Umunna) and others have indicated, are only part of the problem. The Government’s record on standing up for consumers is, frankly, very poor. In recent months, we have seen price rises of between 2% and more than 9% from all the main energy suppliers, yet Ministers sit back and refuse to intervene. We have seen Consumer Focus abolished, with insouciance from the Secretary of State on what that means for consumers. At the same time, we have seen mis-billing and doorstep selling investigations showing that not all is well with the big six energy companies. The Government’s response is that we must leave them alone or they will not invest. Does he understand that that investment is customers’ money? Can he tell the House that he is entirely confident that customers are getting a fair deal?
Chris Huhne
The hon. Lady will know that it is precisely because we are not confident that customers are getting a fair deal that we have, for example, asked the OFT to look at the heating oil market and why procedures are under way to investigate doorstep selling. In all markets we must be ever-vigilant, which is precisely what the Government have been. We have put the consumer’s interests first.
Oral Answers to Questions
Debate between Chris Huhne and Meg Hillier(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Chris Huhne
I am grateful to my hon. Friend for his kind remarks. There was an outstanding team effort at Cancun. The Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), who is responsible for climate change, and the rest of the team played a tremendous part in making sure the outcome was much more successful than we might have hoped even as recently as early in that week.
My hon. Friend the Member for The Wrekin (Mark Pritchard) is absolutely right to make the point he made. In my discussions with Ofgem, I have repeatedly raised the fact that we want it to be firm with energy suppliers and ensure our consumers are not being taken for a ride. Both the chairman, Lord Mogg, and the chief executive are very aware of that, and they are completely in line with our objective of making sure the energy suppliers are providing the best possible deal. The review is looking at precisely this issue. Ofgem does have substantial powers over suppliers and, of course, we can also trigger a competition review.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Labour Members are also pleased that Ofgem is looking into energy pricing. The Government seem to be in a funny place. They appear to accept that energy prices will increase and that that is a price the British public will have to pay, to a degree, for a greener future, but we know that prices rise for many reasons, as the Secretary of State acknowledged. Given the Government’s proposals to increase VAT from January, freeze pay, cut funding to public services and oversee huge job losses, increased energy bills will add to hardship. At the same time, the Government are abolishing Consumer Focus, which battles on behalf of consumers. We have heard lots today about the theory, but consumers are facing the challenges now. Even if energy market reform is successful, can the Secretary of State tell the House what plans he has to improve things for consumers now, as we approach a harsh winter and the measures that I mentioned?
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Given the list that the Secretary of State just read out, one would think that he sees himself as Action Man, but we heard this week that he describes himself as Tesco Man. Last time I questioned the Government about green investment, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), reassured the House that plans for the green investment bank would be unveiled in the spring. Yesterday, I read that the Secretary of State has lost out to the Treasury and that this much-vaunted green investment bank is to be a fund with nowhere near enough resources to generate the £200 billion necessary for investment in green technologies. The question is whether the country has lost out. Given the impact on British business, job creation and the climate, a properly functioning bank cannot wait, and this confusion is very unhelpful to British business. Will he tell the House what is happening?
Chris Huhne
I am grateful to the hon. Lady for her question. I can assure her that this matter is still under review by Ministers on the time scale that we were anticipating. Much as I like and respect The Guardian, having worked for it for 10 years, I have to say that its report gave only a partial view of what I said. I said, among other things, that ducks quack and banks borrow and lend. The Chancellor of the Exchequer was the person who put forward the idea of the green investment bank when he was in opposition, and he knows very well what a bank is. I am absolutely convinced, therefore, that we will have an institution that does exactly what it says on the tin.
Meg Hillier
We still do not have certainty. We hear that the matter is “under review” but we believed that it was a Government commitment. I am proud to be the first Labour/Co-op shadow Secretary of State for climate change, and the Secretary of State has described himself as very happy to be the Tesco of the energy industry. Yet without the green investment bank, whichever model we choose, we will not see the benefits that we want to see. The Minister of State, the hon. Member for Bexhill and Battle, spoke earlier of the importance of community energy and smaller suppliers; we want energy to benefit all. We want to see this bank up and running, and the Secretary of State will have support from the Opposition if it gets going. Will he consider joining me, as the advocate of co-operative climate change, in working for the benefit of all, with the green dividend and green investment shared fairly through an up-and-running bank?
Chris Huhne
I agree that we have to look very carefully at the sources of finance for green investment. There are undoubted obstacles in the way of some of the technologies that are furthest away from the market, in particular, and that makes the very important case for the green investment bank. That—not the concept—is what is under review at the moment. The commitment to a green investment bank is clearly in the Government’s coalition agreement, and it was an idea of the Chancellor of the Exchequer. Some of the reports suggesting that the Chancellor would want to murder his own baby seem a little far-fetched.
Electricity Market Reform
Debate between Chris Huhne and Meg Hillier(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Secretary of State for Energy and Climate Change (Chris Huhne)
Today, we begin consulting on the reform of the electricity market. This programme sits at the heart of my Department’s mission: to deliver secure, affordable and low-carbon energy. The case for reform is clear. We need significant investment in our energy infrastructure. As old coal and nuclear plants shut down, and demand for electricity grows, we must build the next generation of power stations. The electricity that they deliver must be both affordable and sustainable, helping us to meet our emissions reduction targets and keep the lights on.
The current energy market has served us well, but it cannot deliver long-term investment on the scale that we need, nor can it give consumers the best deal. Left untouched, it would lock carbon emissions into the system for decades to come. Investors and boardrooms around the world want to know whether the UK is a good place to do energy business, and today we are setting out our plans to make it one of the best places to do energy business.
The challenges and the opportunities are huge. Put simply, we face growing demand, shrinking supply and ambitious emissions reductions targets: demand for electricity could double by 2050 as we decarbonise the economy; 30% of our electricity must come from renewables by 2020—up from 7% today—to meet our contribution to the European Union’s renewable energy target; and in the next 10 years, a quarter of our existing power plants will need to be replaced, as nuclear and coal plants reach the end of their lives.
Without action, we will face a real and growing threat to the security of our supply. The reserve margin of spare generating capacity will fall over the next decade and the risk of interruptions to our energy supplies will rise, so we must build the next generation of power stations, and act to ensure there will be enough reserve capacity to meet our needs. Together with renewables, we will need new gas-fired power stations and new nuclear plant. We must attract more than £100 billion of investment in new power stations and grid connections by 2020—that is double the investment rate of the past decade.
We must rebalance our market framework to attract investment in the right technologies. At the moment, there is a bias towards low-cost, low-risk fossil fuel generation. Renewables, nuclear and carbon capture and storage all have relatively high up-front capital costs, but a more diverse, lower-carbon energy mix is better for our energy security, better for our economy and better for our planet.
Some measures have already delivered investment in new low-carbon generation—the renewables obligation and the EU emissions trading system—but we must go further and faster. To secure reliable, affordable low-carbon electricity, we must change the market structure. We must create the right framework to ramp up power generation and secure our supply and we must deliver cleaner, greener electricity for the 2020s and beyond.
Today, we are proposing new incentives to drive investment while protecting the rules for investments already made. The focus will shift permanently from conventional fossil fuel-fired electricity to low-carbon technologies—renewables, nuclear and cleaner fossil fuels. Our preferred package of reforms is designed to strike a balance between the best possible deal for consumers and giving existing players and new entrants in the energy sector the certainty they need to raise investment.
Reform will be gradual. We want to reassure industry that the rules for existing investments will be protected. By consulting on a process and principles for the transition to new market arrangements we aim to minimise uncertainty. The competitive market will remain at the centre of our energy policy, but the four elements of the reform package announced today will change incentives in the market and ensure both the security and decarbonisation of our power supply system while minimising costs to consumers.
First, there will be greater long-term certainty about the additional cost of running polluting plant, to make lower carbon investment more attractive. Proposals set out in the Treasury consultation to support the carbon price directly tackle the core problem, putting a better price on emissions, increasing the cost of fossil fuel-based generation and strengthening the carbon price for UK electricity generators.
Secondly, greater revenue certainty for low-carbon generation will make clean energy investment more attractive still. Through the proposed contract for difference feed-in tariff, the Government will guarantee greater revenue certainty for low carbon in the form of a top-up payment if the wholesale price of electricity is below the feed-in tariff and a potential clawback for consumers if wholesale prices go above the contracted tariff.
Thirdly, there will be additional payments to encourage the construction of reserve plants or demand reduction measures to ensure the lights stay on. Capacity payments will create an adequate safety cushion of capacity as the amount of intermittent and inflexible low-carbon generation increases.
Fourthly, there will be a back-stop to limit how much carbon any new coal-fired power stations emit. An emissions performance standard will reinforce the existing requirement that no new coal is built without carbon capture and storage.
Together, those four reforms make good on our commitments in the coalition’s programme for government. They will make the UK a prime location for low-carbon energy investment. They will ensure our energy supply is cleaner and more secure. They will protect the consumer—whereas prices will rise in the medium term, the additional impact of the reform packages will be small, and by 2030 consumer bills will be lower than they would have been if we had not reformed the market. They will lay the foundations for the sustainable economy of the future, bringing jobs up and down the supply chain.
The consultation that opens today invites everyone to tell us whether they think the preferred package of reforms is the right one and to provide the evidence to support their views. Final recommendations will be published in a White Paper in late spring 2011, and the reforms will be introduced before the end of this Parliament. We are also reviewing the role of Ofgem and the energy regulatory framework and today we are publishing the Government’s response to the call for evidence on the terms of the review.
We have a once-in-a-generation chance to rebuild our electricity market, rebuild investor confidence and rebuild our power stations. Like privatisation before it, this will be a seismic shift, securing investment in cleaner, greener power and delivering secure, affordable and low-carbon energy for decades to come.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I thank the right hon. Gentleman for early sight of his statement and for early notice that it would be made—ahead, even, of Government Back Benchers, for which I am grateful.
Let me be clear at the outset that the Opposition believe that the programme is absolutely necessary to secure energy for the future, and we will support fair and sensible mechanisms for reform. We agree with the Secretary of State that this is a once-in-a-generation opportunity to get it right and we hope that we can work with the Government and that, for their part, they will take on board the Opposition’s comments as they consult.
The issues that the Government must tackle are fourfold: security of supply, meeting renewable energy targets, finding the crucial investment for energy infrastructure—some £200 billion—and, as we heard in Question Time, keeping energy prices reasonable. It is crucial that the Government put in place the mechanisms to make new low-carbon investment attractive and they must bridge the looming energy gap without a rush for unabated fossil fuel generation. I am heartened by some of what the Secretary of State has said, but the Government must also provide energy security across a balanced and diverse energy portfolio and they must provide fairness and affordability for consumers.
We face this big challenge together, but we must not allow the consumer to bear the whole burden. The Secretary of State has dangled cheaper prices from 2030 in front of us today—jam tomorrow—but will he provide his modelling so we can be sure that the Government are doing everything they can to ensure that energy prices today are being tackled, too? We cannot allow increased energy costs to be an excuse for increased profit at a cost to our constituents.
The Government must seize this opportunity and act now to give investors the certainty they need and to meet the necessary time scales. Today, the Government have confirmed that the green investment bank is still under review. The Secretary of State has assured us that the Government are committed to low-carbon growth, but the question is: can he do it on time?
This is not the time for delay or dithering. Now is the time for action, and I hope that the Secretary of State will deem 2011 to be the year of decision. He rightly pointed out in his statement that if we do not take prompt action, “The reserve margin of spare generating capacity will fall over the next decade and the risk of interruptions to our energy supplies will rise.” Questions remain about whether new nuclear can be built on time and at the pace required and whether carbon capture and storage can be proven on an industrial scale and commercially applied to all fossil fuels on time. We also need to know the details about the funding of projects 2, 3 and 4. We also need to know whether agreements on energy storage with Norway or others will be on time, again, and sufficient in scale.
There are other questions, too. Although I recognise that many of them cannot be given definitive answers, I know that the Secretary of State’s officials will have modelled different scenarios. I ask, in the spirit of transparency and open debate, that the Secretary of State share as much as possible of his modelling and risk analysis for plugging the energy gap in the next few years with the House and with the Select Committee on Energy and Climate Change so that we can have a fully informed debate.
The Secretary of State today stresses a UK commitment to 30% of electricity from renewables by 2020. His commitment is clear and we support him. However, has he assessed the mood of the coalition’s colleagues in the European Parliament, who often seem to be at sixes and sevens and are certainly not four-square behind his stance? He is, we know, as we heard earlier this week, working closely with European partners. On Monday, he assured the House, with some feeling, that the Government are united on their position in Europe, but what is the true picture?
The statement is on electricity market reform, but given that we enter this winter with the worse gas storage for many years, does the Secretary of State also intend to make proposals on gas infrastructure and storage; and, if so, when?
Finally, will the Secretary of State give certainty to industry and to people who are already paying inflated energy bills that this programme will be enough to encourage energy companies to invest in the UK, to create the jobs that this country needs and, importantly, to protect customers from unaffordable energy bills?
Chris Huhne
I thank the hon. Lady for her comments and particularly for the helpful way in which she couched them. Of course we will be open to Opposition comments on the details of this matter through the consultation period and further on into the legislation. We shall need £110 billion of investment in electricity infrastructure and a total of £200 billion in energy, and one of the most valuable things we can tell investors is that there is, although I do not want to overstate it, substantial cross-party consensus between the coalition parties and the Opposition. That is very valuable in attracting big foreign investors in particular because it means that in the period over which there can be a payback of investments, which might be 20 years, foreign investors can be assured that there will be real stability of policy. I very much value that consensus and very much want to work with the hon. Lady to make sure it is there.
Let me deal with the hon. Lady’s concerns about consumers, which are absolutely appropriate. We have to make sure that business consumers and households in Britain get the best possible deal in supplies of energy—in this case, electricity. A fundamental part of the policy proposal that I hope she will welcome is that by providing investors with the certainty of a feed-in tariff, with a contract for difference, we will attract investment from the big six electricity companies and attract into the market other players—new entrants—to make it more competitive. We will also unlock the pools of capital that various Members have been concerned will not be available without this framework. It is very much part of our thinking that in trying to deal with the underlying problem of a more competitive market we should get more players into the market, because that will ultimately give the best assurance to consumers that we will get the best possible deal.
The hon. Lady asked about the shorter-term view. I made it clear in my statement that this package will deliver lower-cost electricity for consumers than would otherwise be the case on a 2030 view. We will redo the estimates for overall energy policy in the annual energy statement. As far as I can see, on the current basis there is no reason to expect that to change. In the summer, we said that with the overall package of policies we had set out, if one takes into account the energy efficiency packages and the likely reduction in bills as a result, consumers would pay about 1% more in 2020 than would otherwise be the case. That figure involves a fundamental assumption that the oil price will be $80 a barrel at that time, with a corresponding gas price, but oil prices might be substantially higher; obviously, spot oil prices are substantially higher today. The break-even point for consumers is $100 a barrel, and if the price goes north of that the policy framework we are setting out will leave British consumers paying less than if they were reliant, over the relevant period, on the volatility of the world oil and gas markets. That is fundamental. We are dealing with conditions of considerable uncertainty about the future, particularly in the oil and gas markets. We have heard today that the US Attorney General is taking a case against BP as a result of what happened in the gulf of Mexico. We know that there are rising risks and costs in extracting fossil fuels and we have to take that into account when we set a policy that can protect British consumers from the vagaries that might come.
The green investment bank is going to be a clear part of our thinking in dealing with the enormous investment challenge, and Ministers are reviewing the exact market failures that we are attempting to address with the bank. It is a long-term project and the most important thing, when we talk about decarbonising the UK economy, is not to get up and running for 1 January next year a green investment bank that might be half-baked, but to get it right. This institution has to be with us for the long term, right through to 2050, providing lending to help decarbonise the economy over the long haul, so I would much rather get it right than do it early and get it wrong.
I take on board the hon. Lady’s point about the need to deliver. I shall not rub salt in the Opposition’s wounds about the 13 years they were in power, but I remind her that we have inherited the position of being 25th out of 27 EU member states on renewable energy. [Interruption.] The hon. Member for West Ham (Lyn Brown) might chunter about that, but these are the facts. I am not making any comments about them, but am merely saying that we are 25th out of 27 EU countries and we need to improve that position.
The hon. Member for Hackney South and Shoreditch (Meg Hillier) also asked us to make available our modelling basis and I am very happy to do that. Indeed, the models that we used for the 2050 pathways study are already available on the Department’s website. Any Member of the House will find that function very user-friendly; it is Professor David Mackay’s favourite executive toy. Users can decide they want more renewables, a little less nuclear, a little more nuclear or a little more clean coal, put the change in and find out what the consequences would be. We aim to be extremely open and transparent in our whole process.
On the European Parliament, the reality is that we will determine these matters in this Parliament, not the European Parliament. I note that we have an overwhelming majority, judging by the recent vote on the regulatory justification for nuclear, for the sort of package that we have set out.
Cancun Climate Change Conference
Debate between Chris Huhne and Meg Hillier(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I thank the Secretary of State for his statement, and for early sight of it.
International progress on climate change is of the utmost importance to us all. I am pleased that the Secretary of State has been able to attend the House in person today, so that we have a chance to question the Government on progress. We must acknowledge that the agreements made in Cancun are an important step in the right direction, and, on behalf of the Opposition, I join the right hon. Gentleman in congratulating the Mexican Government on creating an environment in which the nations of the world could agree a common statement. The statement of intent that has come out of Cancun builds on provisions made by my right hon. Friend the Member for Doncaster North (Edward Miliband) in Copenhagen last year, and we all hope that it will pave the way for more ambitious aims in South Africa next year.
We welcome the establishment of a climate fund to help developing nations and commitments to take action on deforestation. We also welcome the acknowledgement of the gap between the promised emission cuts and the cuts that the science tell us are necessary. Does the Secretary of State believe that holding to an increase of below 2º is enough, given that scientists now say that an increase of between 2º and 4º is more likely?
We have a long way to go, and, as the Secretary of State said, it is essential that the Government take a lead internationally. The right hon. Gentleman has already suggested that the European emission reduction target should be 30% by 2020, and he recently issued a statement with Germany and France pressing for such a reduction in carbon dioxide emissions. Last week, the Committee on Climate Change reported in support of that aim. We are delighted that Spain is now on board. Will the Secretary of State tell us whether that is the extent of European Union support? He talks of pressing for measures in the EU, but will he say what practical steps he and the Government are taking in Europe? It might be said that the Government whom he represents are not of one mind when it comes to European relations, and we and the country need to know which point of view dominates the agenda. Will there really be progress by February?
The Secretary of State was involved in discussions and conversations on Kyoto. Is he able to give the House a better sense of how those negotiations went, although they were not an outright success?
The climate fund to assist developing nations is a welcome step, but we need assurances that funds will be in place. I welcome the Secretary of State’s aim to see rapid progress on the part of the transitional committee. Can he give us a timetable for that progress? We have agreements, but we need to make sure that actions are taken or else the agreements will not be a foundation for change. Will the Secretary of State also give us further details on how finance will be secured, because the developing countries need this life-saving finance and they and their citizens cannot wait?
Finally, we need to see leadership from Britain and Europe over the next 12 months, before countries meet again in South Africa. The Government must demonstrate leadership at home—here in the UK—and in Europe. We need the Government to commit to low-carbon growth and to show they can deliver before the opportunity has passed. Although we have had welcome announcements from the Government about implementing the green deal for householders, we do not know whether it will include a carbon reduction target. The right hon. Gentleman has also announced that he will go ahead with the green investment bank, but we do not know whether there will be enough money for it to do its job.
We lack detail, therefore, yet we hear from businesses of the need for certainty, and households in fuel poverty need support and certainty too. We need flesh on the bones, and we need action between now and the next conference in South Africa.
Chris Huhne
I thank the hon. Lady for her remarks, and I am delighted that there is, I think, a broad measure of political support from all three main parties in the House—and also from the nationalist parties, although none of their representatives is in the Chamber.
The hon. Lady was absolutely right to mention the continuing gap between what the science tells us is necessary to reduce carbon emissions and the pledges that were made in the Copenhagen accord and that are now incorporated in the United Nations framework convention on climate change process. The gap will be assessed as part of the work that will be set in train as a result of the agreements in Cancun, and the UN environment programme report was a useful first step in pointing that out.
I make no bones about the fact that we argued for, and would have liked, a clear commitment to a peaking of global emissions by 2020. The reality is that time is running out, and we need to be as precise as possible. We were not successful in achieving that clear and specific target, but we did have a clear commitment on peaking global emissions as early as possible and, obviously, we will move as quickly as we can towards achieving certainty.
Yes, it was welcome that Spain joined us. We have been working quite hard on the 30% commitment, including through some meetings in Cancun. The Minister with responsibility for climate change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), had meetings with the incoming presidency, and I had meetings with the Spanish Minister and other colleagues. Apart from Spain, France and Germany, we also now have a commitment from Denmark, and I am confident we will shortly have a commitment from Sweden as well, with all of them broadly in the same place. We must recognise that there are difficulties, especially for some of the economies still in transition, particularly Poland, which rely very much on lignite and hard coal, and we can try to deal with that. The process is under way and it will be important to address that in the new year.
The negotiations on legal form were always going to be exceptionally difficult, and we knew we could not reach an outcome. For the UK, the key negotiating strategy was to make sure that we embodied in the agreement at Cancun a substantial amount of substance that we can then show at Durban next year. Hopefully, that will provide a real incentive to the progressive countries that want to do a deal and to some of the more reluctant countries, by showing that there is enough on the table to make them be a little more flexible than they have been thus far on, for example, whether there is a commitment in the Kyoto protocol or whether it is in the convention track—and, indeed, whether there is a legal commitment in the convention track, which I very much hope, so that we can, effectively, have two parallel sides.
The hon. Lady asked about the finance. Fast-start finance is under way, and I am very pleased to be able to say that the Government have already disbursed the fast-start commitments we made for this financial year, and they have also been identified for the next financial year. Therefore, that money, which was agreed at Copenhagen, is being paid out. On the broader objective of $100 billion a year, we had an agreement to take note of the work that the advisory group on finance had done. That means that a lot of the work—for example, on bunker fuels and the potential for raising finance from aviation—can be taken into account and will go forward to Durban. I am cautiously optimistic that this advance will be crucial in getting the developing countries to sign up next year. This agreement, by the way, is the first time ever we have had an agreement by the developing countries to reduce their emissions compared with business as usual. That is quite a step forward, although it would obviously be nice to make it legally binding.
I can assure the hon. Lady that there is no division in the Government on leadership in Europe. I know she is sceptical, but we have worked very closely with all parts of Government, particularly the Foreign and Commonwealth Office, which has done an outstanding job. The team in Mexico City and the FCO more widely have done an outstanding job in helping us to prepare for these talks. It is an agreed part of our strategy as a Government that we recognise that our power as a nation to achieve our national objectives in the area of climate change is immeasurably greater the greater the extent to which we work through our European partners and manage to get them on board. That has been a key part of our approach to this issue.
Redfern Inquiry
Debate between Chris Huhne and Meg Hillier(13 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Secretary of State for Energy and Climate Change (Chris Huhne)
Today I am publishing the report of the Redfern inquiry, which was established in 2007 to investigate the processes and practices surrounding the analysis of human tissue that was carried out in UK nuclear facilities from 1955 to 1992. The inquiry examined the circumstances in which organs or tissue were removed from individuals at NHS or other facilities, and sent to be analysed at nuclear laboratory establishments.
To lose a family member is tragic. To find out—sometimes decades later—that tissue had been taken without consent is an unimaginable distress. That knowledge is a burden that no one should have to bear. There is no time limit on grief; nor is there on apologies. I would like to take this opportunity to express my heartfelt regret, and to apologise to the families and relatives of those involved. I hope that the publication of today's report goes some way toward providing the closure that they deserve. The events described in the inquiry should never have happened in the first place. We have learned the lessons of the past. The law on human tissue has been reviewed, and a rigorous regulatory system is now in place, in which both the public and professionals have confidence.
I would like to thank the chairman of the inquiry, Mr Michael Redfern QC, for conducting the investigation. The inquiry has also benefited from the support of the nuclear industry and other key stakeholders, who have co-operated fully. The inquiry was established to investigate the circumstances in which organs were removed from individuals, and were sent to and analysed at Sellafield. However, as evidence came to light of similar work carried out at other sites and of studies involving non-nuclear workers, Michael Redfern QC was asked to make those additional cases part of his inquiry.
The inquiry was initially sponsored by the Department of Trade and Industry, which at that time had responsibility for energy policy. The Department of Health became a co-sponsor when the terms of reference were expanded to allow the inquiry to access relevant NHS information, and to investigate the part played by hospitals in which the post-mortem examinations had been conducted. Although not a sponsor of the inquiry, the Ministry of Justice also has an interest in the inquiry's findings and recommendations in respect of the coroner's role.
The report highlights unacceptable working practices within the nuclear industry, NHS pathology services and the coronial service, and concludes that families' views were not always obtained as required under the Human Tissue Act 1961. It acknowledges that these events occurred a number of decades ago, and puts them within the context of the times and current practice. Many of the issues raised by the inquiry have since been addressed by changes to the law, including the introduction of the Human Tissue Act 2004.
The inquiry found that organs from 64 former Sellafield workers were removed by pathologists and taken for analysis at Sellafield between 1960 and 1991. In addition, organs taken from 12 workers at other nuclear sites were analysed at, or at the request of, Sellafield, giving a total cohort of 76. The inquiry also found evidence of other individuals whose organs were analysed at Sellafield. The report finds that there was a lack of ethical consideration of the implications of the research work that the industry was doing; that limited supervision was undertaken; and that relationships between pathologists, coroners and the Sellafield medical officers became too close.
The inquiry has found that organs from a small number of former Ministry of Defence employees were removed for analysis. It has been difficult to establish the legality of a minority of these removals. Also, during the 1950s and 1960s the Medical Research Council oversaw research measuring levels of strontium 90 in human bone obtained at post-mortem. It was a national survey, involving more than 6,000 people, mostly children, and was not linked to former nuclear workers.
The inquiry also considered work undertaken by the National Radiological Protection Board. Across its entire remit, the inquiry found that families' views about organ retention were not always sought, and that very few families knew that organs were taken for analysis. Research using human tissue at that time was carried out under different legislation, and within a culture that took a very different approach to these matters than we do today. That is not to diminish the distress and suffering caused to families by the events of the past. However, we have learned from the mistakes of the past, and we now have in place the legislative and regulatory framework that makes consent the fundamental principle underpinning the lawful retention and use of body parts, organs and tissue from the living or the deceased for such purposes.
My right hon. Friend the Secretary of State for Health and I welcome the inquiry’s recognition of the changes in the law and the associated regulatory framework relating to the taking, use and storage of human tissue, which have been put in place since the events leading up to the inquiry. Since the Human Tissue Act 2004 came into force, we have seen the development of robust regulation that focuses on compliance through the provision of expert advice and guidance—and where regulatory action is taken if standards are not met.
My right hon. and learned Friend the Secretary of State for Justice has the principal interest in the inquiry’s findings relating to the role of coroners. His Department is responsible for coronial law and policy, but as coroners are independent judicial office holders, it does not monitor how they carry out their functions in individual cases unless specific complaints are made. Communication between families, coroners and pathologists was, and still is, vital.
Changes to the 1984 coroners rules, which were introduced alongside the human tissue legislation, are aimed at ensuring that families’ wishes about what happens to organs and tissue retained after a post-mortem examination can be properly established and acted upon. My right hon. and learned Friend also intends to take forward several provisions in the Coroners and Justice Act 2009 which address other problems that Mr Redfern identifies and aim to prevent any recurrence of the events that led to the establishment of his inquiry.
Although the Government are not proceeding with the role of a chief coroner, we intend to transfer many of the intended leadership functions of the post to the Lord Chancellor, or possibly to the senior judiciary. There will be higher standards when commissioning post-mortem examinations, and in the way that coroners communicate with bereaved families. There will be more effective operational delivery, with an end to rigid, geographic boundary restrictions. Training for coroners and their staff will be maintained and improved, and coroners’ work will be more transparent so that unacceptable practices can be avoided or challenged and deficiencies can be tackled. We are also considering introducing the new, more accountable system for appointing coroners and their deputies that the 2009 Act enabled.
The inquiry has sought and received assurances from all the key nuclear industry stakeholders that the practice of retaining organs or tissue at autopsy has ceased. I hope that the families of those involved can take some comfort from the knowledge that the practices that the inquiry examined simply would not be permissible today. I commend this statement to the House.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I thank the Secretary of State and his office for early sight of his statement on this very important matter.
Our first sympathies must be for the families. They have lived through an ordeal and had to relive or, in some cases, discover what happened to their loved ones after death. It cannot have been easy, and their forbearance has been great. I very much welcome the Secretary of State’s heartfelt apology. I, like other Members, have had only a short time to look at the report, but it is clear that it is thorough, clearly written and a credit to the hard work of Michael Redfern QC and his team. My hon. Friend the Member for Copeland (Mr Reed) has ably represented many of the families over a long period, and today the families must come first.
The events in question took place some time ago, and it has been challenging to piece together the history. The issues are complex, and Michael Redfern has produced a report that not only explains what happens, but provides reassurance that such practices are no longer used. The events, let us remember, took place in a different era when there was much debate about the safety of the nuclear industry, and the GMB at the time campaigned hard for a compensation scheme for nuclear workers who had been exposed to excess radiation. Today, a compensation scheme is in place.
The report is clear that the law at the time was in place to prevent the removal of human tissue without proper consent from those who had died. Unfortunately, that did not prevent these events from happening. It is an important and salutary reminder to all of us in this House, and elsewhere, that we need to remain vigilant in our scrutiny of professional practice and of the work of scientists. Science is vital to the UK, and we have a worldwide reputation to protect. It is in all our interests to get it right.
I have some questions for the Secretary of State. Is he able to reassure the public that the events outlined in the Redfern inquiry report are historical and are not taking place today? We have the 2004 Act; we now need to be vigilant about it.
The inquiry looked into the issue of removal of organs from 76 people. Is the Secretary of State satisfied that that was the extent of the case? I am sure that he will agree that any families who are concerned should have an easy route to information about their loved ones; perhaps he could explain how they can find out more.
The Secretary of State rightly talks about the new rigorous regulatory system, but it is the Government’s intention to abolish the Human Tissue Authority and transfer its functions to other bodies. What guarantee can he give that such important functions will not be lost as a result of the Government’s proposed changes?
The Secretary of State is clear that such acts would not be permissible today, as they were not then. It is therefore particularly important that procedures are in place to uncover any practices of this nature in future. Can he further explain what contact the Government have had or are planning to have with the professions concerned, particularly pathologists and coroners, to ensure that robust procedures are in place so that this could not happen again?
This report does not stop the heartache for the families, but it lays out the facts, and I hope that that gives them some comfort.
Chris Huhne
I thank the hon. Lady. I think that this is an issue on which we can all unite, in all parts of the House, in our frank shock at the events that took place, albeit many decades ago in many cases. I am able to give the reassurance that the hon. Lady seeks, and the reassurance to the public, that these events are historical and, as far as we can tell, are not taking place today; they would clearly be illegal. The Redfern inquiry sought assurances from all the key players—and indeed received those assurances—that there was nothing taking place today that would be similar.
In the course of the inquiry, as the report makes clear, it became obvious that the removal of organs from a limited number of people in fact related to only a part of the total. The right hon. Member for Edinburgh South West (Mr Darling), as the then Secretary of State for Trade and Industry, knew about that when the inquiry was commissioned. The inquiry points out that once we take account of other cases, the total is nearly 6,000 across the country. That is a very much greater figure than we thought at the time.
The hon. Lady is right to say that the Human Tissue Authority is to be abolished by the Government and its functions transferred to other bodies. I have spoken with my colleagues from the Department of Health on this point. Those functions will be transferred to other organisations and dealt with by the Department of Health. There will be no question of any relenting on the key functions that were set out for the Human Tissue Authority.
The professions have been engaged in conversations with both the Department of Health and the Ministry of Justice. I am confident that the lessons of the report will be learned and that robust procedures will be put in place to ensure that such questionable practices do not recur.
The hon. Lady asked about current safety levels in the nuclear industry. I can assure her that we have a rigorous safety and inspection regime which is kept under constant review in order to make sure that safety levels are absolutely at the highest.